|
||
New York Times Still Pushing $70-an-hour Autoworker Myth
Like a zombie that can't be killed, the $70-an-hour autoworker lie is alive and well, roaming the media landscape -- and still being peddled by The New York Times in Monday's edition.
As Media Matters and other critics reported last week, it's a conservative myth concocted by totaling all wages, plus health and benefit costs to current workers and 450,000 retirees and their families -- and then deceptively dividing that huge total payout by the number of current UAW workers, about 140,000 in Detroit.
Here's what the Times said today in an article about the autoworkers considering concessions:
Some critics have taken aim at the automakers' hourly labor costs, which average more than $70 for senior workers, including wages and the value of benefits like pensions and health care.
Those costs run closer to $46 an hour at nonunion plants like Toyota's factory in Georgetown, Ky., and are even less at newer plants farther South, where foreign automakers have pegged wages closer to local rates.
In fact, as I and others previously reported, The Big Three true labor costs are on the way to matching those offered by non-union Japanese plants in the U.S.
It bears repeating what Media Matters' Eric Boehlert said on the political uses of this myth:
As Rep. Barney Frank (D-MA) pointed out during congressional hearings last week, "There is apparently a cultural condition that's more ready to accept aid to a white-collar industry than the blue-collar industry, and that has to be confronted."
That cultural condition seems to extend to, and be embraced by, today's white-collar press corps.Make no mistake: The $70-an-hour claim represents a classic case of conservative misinformation. It's also a very dangerous one. The falsehood about autoworkers is being spread at a crucial time, when a make-or-break public debate is taking place, a debate that could affect millions of American workers.
What will it take for the mainstream media to accurately report on the actual labor costs in Detroit while Congress is considering whether to give the Big Three a bailout?
Loading comments…
Want to reply to a comment? Hint: Click "Reply" at the bottom of the comment; after being approved your comment will appear directly underneath the comment you replied to
All interesting comments. Now to the real question - how many of you want our elected representatives DICTATING wages in the United States of America? Because that is what the latest failed proposal of the Republican Senators does. It tells United States workers what they can make.
The Senate and Congress is supposed to represent American citizens and safeguard our individual rights. One of those rights is to be able to negotiate salary with an employer, whether done individually or through a Union.
Today our legislatures want to dictate wages and benefits for the automotive industry, tomorrow it'll be healthcare, then information Technology, then retail industries, etc. Pretty soon we will all be living in hovels and eating watery soup and stale bread for dinner. - unless these same Senators pass legislation that tells our creditors to cut our bills in equal percentages as our salaries are cut - and there is no chance of that happening!
Economic times are tough now, and won't get better in the near future. But that is NOT a good reason to DICTATE wages for anyone.
By the way, our Senate and Congressional representatives NEGOTIATE WITH THEMSELVES FOR RAISES, and, of course, give themselves raises. Nice setup, right? As the people who pay those wages, we need to DEMAND that they cut their wages in half to show a good example to the country, to show their solidarity with every American citizen and business.
@Snake-Eyes
}}}And I am saying that perhaps the "facts" should be changed to include these figures & things will be more evenly ironed out.{{{
Oh, how SILLY of me to think that such UNCHANGABLE things as FACTS should just be changed! In that case, while we're at it, why don't we change it so that the FACT of the sun rising in the East tomorrow will mean that it will rise in the WEST! I'm tired of having the sun in my eyes both directions of my commute, so this will fix EVERYTHING!!
You obviously don't understand what a fact or the truth are! Labor costs are, by their very name, any cost that you incur employing people. They have NOTHING to do with contractually obligated ADMINISTRATIVE costs, such as payments into a pension fund which is not being used by CURRENT employees! You CAN count the costs of what you are placing into a pension fund for someone who is actually on the floor WORKING as a labor cost, but NOT for his father who drawing OUT of the fund!
Even if I give Mr. Levine the extreme benefit of the doubt, and say that he is correct is his calculation that the workers at GM are 'on their way' to making the $46.00/hr of the non-union counterparts, it should still be considered severe overpayment. My wife, who has a master's degree in social work, works with dying patients in hospice care, makes $31.00/hour. To tell me that a factory worker for GM is making 50 percent more than she makes is an abomination of priorities and shows how far astray unions have gone in this country.
No that shows how out of whack the REST of the economy has gotten! The fact of the matter is that you SHOULD be able to go out with only a high school diploma and raise a family!
In addition to this, you are DELIBERATELY misreading the post! The average worker at the big three is not making 150% of your wife's pay. The average is making around 2/3 of your wife's pay, since the newer workers are all coming in at half the pay of the older ones! The $46/hr figure is the MAXIMUM that the COMPANY has to pay between wages, benefits, and taxes for each employee, but even the HIGHEST waged employees are making less than your wife!
Bravo!
Reread the article please. I would bet that if you took your wife's wages, insurance, and other overhead costs, such as the retirement costs of other who have already retired, the numbers would be quite different. Even if there were a difference, does that make the autoworker overpaid or your wife underpaid?
tmeg, thank you for pointing out another fatal flaw in our society. for 31 dollars perhour, we can fly the dying patients to India where they will be couseled by drs. who will work for 4 dollars perhour. These overpaid social workers are a drain on our economy and need to make themselves competitive in our new world economy. Thanks to forward thinkers like you we can eventually all sit down together over a bowl of millet and dirty water and celebrate our newfound competitivness.
The GM website gives the 2004 labor wage information as follows:
"In 2004, the last full year for data, GM's worldwide payrolls from continuing operations totaled $21.5 billion, up from $20.9 billion in 2003. In the United States, hourly payroll totaled $8.7 billion. The average labor cost per hour for the U.S. hourly work force, which includes both wages and benefits, was $73.73 in 2004."
So to claim that this is a myth perpetuated by the media is completely false.
http://www.gm.com/corporate/responsibility/reports/05/500_economic/3_thirty/530.html
You are looking at 2004 data. It is not relevant to the current discussion because the contracts have been renegotiated since then.
The most updated information on the GM website is for the 2005 fiscal year and the average hourly rate increased from the $73.73 to $81.18. I am not disputing changes have been made with regards to the contracts, however wages made public by GM are being accurately reported .
http://www.gm.com/corporate/responsibility/reports/06/500_economic/1_ten/510.html
First, it's been repeated by the media ad nauseum without question again and again!
Second, you are trusting the labor figures of a company which has been trying to break up the unions for DECADES now..... rather than ANY sort of logic or brainpower....
Put this article in the form of a Letter to the Editor and see if NYT publishes it
The problem here is the myth being perpetuated by the author here. Going back to the article that is linked at the beginning of the above rant;
"Some critics have taken aim at the automakers’ hourly labor costs, which average more than $70 for senior workers, including wages and the value of benefits like pensions and health care."
That is the direct quote. Notice:
A. This is including things like pensions and health care.
B. This is NOT A SALARY FIGURE. This is a labor cost figure.
C. Of course these go into the total cost of the car. Who cares if you call them "labor" costs or operating costs or carebear costs. All the pensions and health benefits go into the cost of the product, which in turn affects its price. The author of the NYT article is talking about the costs of making a product, not how much someone earns.
D. It's stupid ridiculous to think that auto workers should get paid when they are no longer working. That only makes sense if you're an auto worker. Pension packages are nice, but they are a huge burden to companies and are usually the first to go. The problem is if the company makes a move to save its own ass, the union leaders immediately start crying, force a strike, and shut down the entire company, further invoking losses. It's absolutely amazing to see a union be so self-harmful.
A pension is a savings account built up out of your paycheck (YOUR OWN MONEY) with the company chipping in a certain percentage on top. Take home pay is lower, but you're ultimately building up retirement security. To reneg on those agreements is theft. Pensioners deserves AT LEAST the amount back out that they put in.
Certain union personalities and practices MAY have gone to extremes in a few cases but damn we have lots to thank them for: minimum wage (insuring that companies can't pit workers against each other during high unemployment periods), job security (so you can't be fired for taking one sick day like in the 19th century) safer workplaces (so for example temp workers cannot be trampled to death by a mob the company neglected to prepare for adequately, without some major compensation to the dead worker's family), 40 hour work week (instead of being required to work 12-16 hours a day, plus Saturdays, just to keep your job); end of children under 14 working 12 hours at heavy factory and textile jobs; end of sweatshop exploitation. . .
Nope. I value the union for giving workers parity against owners. If owners can't keep companies afloat they should first see why their CEOs need gazillions for sitting in air conditioned offices, flying company jets, while failing their jobs. Workers would never be allowed to fail that hard and long without being fired.
Nope. "Ya can't scare me! I'm sticking with the union!!!" -- Woody Gutherie
I agree with almost everything you said and all of the spirit in which you said it. Unions formed to combat the excesses of management and owners. Their rise and decline still continues to mirror how management and owners treat workers. Where treated fairly, workers do not want or need a union. Where not treated fairly, workers need and want a union.
On one small point we disagree. In many contracts, especially a few decades ago, pension payments were not (salary - pension + company contribution). They were (salary + company contribution). The union agreement is a contract that needs to be honored, however.
SOMEONE FROM THE UNIONS MUST GET ON TV ON EACH CABLE TALKING SHOW FROM CNN TO FOX AND CALL OUT THE PEOPLE BY NAME AND COMPANY CALL THEM LIARS AND THEN PROCEED TO SHOW THE TRUE FACTS . U SEE THESE REPORTES ARE SO USED TO PRINTING STORIES THAT NO ONE WILL CHALLENGE THEM . THE STORY IS REPAETED AND NEVER TORN DOWN. THIS 70 DOLLARS IS A LIE !!!!!!! IT IS MORE LIKE 28 DOLLARS . SO WHERE ARE THE UNION REPS !!!!!!!!!!! TO DEBUNK THIS MYTH
Even 46 bucks an hour is pretty good for marginally edumacated folks in the intellectually-challenged South. I wish everyone tried living on 10-12 dollars an hour I make. Then you would know why I'm so pi$$ed about any bailout to bankers & CEO's.
It is difficult to live on $10-12/hr for a short period of time and impossible for a long period. That is why people want the union jobs or, at least, the union wages.
The article did not say these people take home $46/hr and I cannot believe that they do as this would equate to $90,000+ per year. $46/hr includes benefits and overhead, still way above what you make, but is the problem your low wages or the higher wages of the others?
Look, the reason that this matters is because the $70/hr. figure that is being thrown around implies that current employees are earning this amount in current wages and THEIR OWN future benefits. If everyone understands that this is not true, then we don't have anything on which to disagree.
However, I would argue that this figure creates a perception that previously earned pension costs can be removed through bargaining with the UAW about current employees and this is not the case.
Yes, the overhead in the american auto companies is high and should be reduced, but that cannot be done through reducing what current auto workers earn. The only way for taxpayers to assess whether the UAW should make concessions on current workers earnings and benefits is to know what these current costs are, separate from prior obligations.
By the way, pension funding is a management decision. Management could have fully funded these liabilities but they chose not to.
Actually, the union HAS made concession which will, eventually, VASTLY reduce what the company has to spend on pensions! This is in the same contract which included the cut in pay for new workers, bringing them in at HALF what the older workers were getting!
So, can't the union bail them out? Where is the "union" in this time of need? Why aren't they out front fighting the good fight for the industry??? What happened????? Exactly where are they in this crisis?????????
We need more Barneys.
.
continued from....
In summary, the $70 per hour employee cost is a fact, not a myth, and your assertion that the Big 3 are already on their way to becoming as employee cost efficient is Toyota and Honda is simply a lie. If you think it's not a lie, back it up with numerical support and cite your sources.
Absolutely right. That's the danger of not paying retirement costs as you go, like 401k matching. Pension costs are current labor costs if they are being paid right now, even if for work done years ago. The UAW has wrecked their own industry and its hard to believe some people think stronger unions are an answer to this crisis.
Pension costs are only LABOR costs if they are being spent on the CURRENT LABOR FORCE! If the company failed to put enough money into the pension fund, or it underperformed and they must pay NOW for FORMER workers, it's an ADMINISTRATIVE cost, much like the cost for the actual supplies used to make the cars!
Only conservative IDIOTS oppose stronger unions, and that is simply because they want to trim what they would reasonably pay to labor and reroute those funds as profit and/or operating capital.
The absurdity of ANY blue collar worker opposing strong unions in ALL aspects of employment in the US is sad indicator of just how willfully ignorant people will be in order to get the quick gratification of a crappy job NOW, rather than take on corporations and take on the long fight for workers' rights in the workplace.
Its even harder to believe that some think a lack of strong unions is good for the working man. Faults, warts and all I'd still trust the honesty of a union leader over a CEO any day.
WRONG! The only "labor" costs that can be counted are the ones that apply to the actual LABOR FORCE BUILDING THE PRODUCT! You might as well call EVERYTHING that the company spends in making the car, from the cost for the supplies, to the electricity to run the equipment, to the water in the toilets as a labor cost!
In the paragaraph where I say they're "On the way" I link to the leading independent consultant report on productivity and labor costs. The source is this:
http://www.reuters.com/article/pressRelease/idUS150987+05-Jun-2008+PRN20080605
Sample quote, with plentiful data in the report itself:
- New UAW contracts will further reduce the total labor cost gap between
Detroit Three and competitors over the next three years.
The facts are simple, the calculation you cited does add up to over $70 per hour whereas the same calculation for Toyota or Honda equals something in the low $40 per hour range. This is all the Times is saying, it never said the employees received a wage equal to $70 per hour.
So it's not a myth, it's a fact. If people are too dumb to recognize the difference between hourly employee cost and hourly employee wage then your article should address the public's failure to understand basic economic principles.
As you mentioned "The Big Three true labor costs are on the way to matching those offered by non-union Japanese plants in the U.S.". OK, this is the myth. Yes their have been some cutbacks, but not far enough and not soon enough. GM is apparently claiming it may go under any moment, so why not initiate these cutbacks now, not at some future point that is "on the way". Also, even the planned cutbacks will not be sufficient to get down to the low $40 per hour employee cost ratio of Toyota and Honda (readers please not that Levine never even makes the claim that these cuts ever will achieve actual parity with their competition, just that they are trending in that direction -- as opposed to immediate bankruptcy) so even in several years from now the Big Three will still be at a massive disadvantage.
continued...
In your first paragraph your saying that the NYTs isnt claiming its the cost of the wages of the workers currently building the cars that is the problem. In your last paragraph you are claiming that is is the wages of the workers currently building the cars that is the problem. If the average GM union worker is getting paid $28 an hour, close to the Toyota worker, then why is it the fault of the American Union worker currently building the car?
The unions have been getting hammered for 15-20 years. The pendulum has swung. It's time to have some respect for the hard working Americans.
No, you missed the point between employee costs and employee wages. The Big 3 employees salaries are only slightly higher then their competition, so that really isn't the problem. However, wages are only one componet of employee costs. For example, the Big 3 still have a "job banks" problem where the union employees who are layed off still receive 95% of their salary for sitting on their butts. Other examples include super premier health plans and incredibly generous pension plans. Honda and Toyota don't offer these same types of benefits to their U.S. employees, hence their total employee costs (not salaries) are much lower. If the Big 3 want to compete they should just take Toyota's employee compensation and benefit plan and adopt it as their own.
my husband is an american auto worker. yes, we have enjoyed very good wages and benefits over the years. after 35 years, my husband has chronic back and arm pain and his body is older than it's years so i resent the implication that he was handed all this money and didn't work for it. i would also like to point out that toyotas and hondas aren't really any cheaper than american cars yet they do not have the pension costs that the big 3 have and they do not pay the same wages, not even in america. and before you start bashing, check out the last uaw contract passed which eliminates the pension, cuts the hourly wage in half, and also cuts benefits. this is to new workers but the concessions are in place. say what you will about unions or ceos but please do not accuse these people of not doing an honest days work.
That's because Toyota and Honda make profits, like businesses are supposed to, instead of chronically losing money.
Toyota and Honda make profits because they receive positive benefits from their home governments and are allowed to import cars to sell in the US for less than they sell for in Japan (i.e. 'dumping'). The US needs to become "America Inc." if US companies are to compete globally and the nation is to remain independent.
I totally respect your husband's hard work. However, before YOU go bashing just remember all of the average American families making average wages that struggled to purchase these vehicles so you could enjoy your very good wages & benefits. I trully feel for his physical condition, but at least he has health benefits to help him. Think of all those Americans who have worked just as hard as your husband but have not gotten to reap the same benefits? Be thankful, life has been good to you.
So what you're saying is that we should all go down to YOUR level, rather than bring you up to OUR level???
UAW has accepted pay cut after pay cut. Average UAW starting pay is $14-16/hour. If you want to add benefits, then add benefits across the board when comparing wages.
When Detroit started manufacturing cars in Mexico they didn't lower the price did they? They just increased the profit margin. So much for the myth that labor costs are killing them. Japanese CEO's preside over companies that make products that people actually like, and they don't complain when required to make more fuel-efficient cars. American CEO's-not only in the auto industry, but in the finance industry- make salaries many times their Japanese counterparts and lead their companies down the road to ruin. Too many CEO's destroy their companies and still get rewarded. We put up with it because we're a country of sheep who actually believe giving money to the rich leads them to build factories and employ Americans. CEO's who fail to perform should be fired and they should leave empty-handed.
I'm so tired hearing from the east-coast elitist media (and you regurgitating it) that American companies don't make cars that people want to buy, or cars that are fuel efficient enough. They made big and somewhat low-mpg cars because there was great demand for them when fuel was cheap and it is getting cheap again. But MUCH more importantly, suv's gave them the higher margins they needed to pay the legacy costs and UAW demands that the Japanese companies don't have. They can't make money on small cars. Its really sad, the Chevy Volt might be a great idea, but they are planning to lose money on each one for the foreseeable future. That's no way to run a business. One WSJournal editor wrote a year ago that the Volt program was just a "greenwash" for GM to make a federal bailout more palatable to Washington. How right that guy was!
And of course the BILLIONS of dollars that they spent (and still spend!!!!!) advertising those gas guzzlers had NOTHING to do with people wanting to buy them, right???
The reason that they preferred to sell the guzzlers is because they made a somewhat higher profit MARGIN on those, so that they didn't have to sell as many to make more profit!! And that's why they spent so much money on advertising. And I will grant that advertising doesn't always work, but lets be serious here, if it didn't work reasonably well, they WOULDN'T BE SPENDING VAST SUMS OF MONEY ON IT!!!
Ok, Art, You don't think this "alumni" cost should be attributed to labor. Where would you put it?
If the non-big three don't have this cost as they apparently don't, then it is a cost of "labor past and present" that they clearly don't share. I agree that lumping this in with current wages and somehow tying it to hourly production costs is a bit deceitful, but who suffers from this deceit?
It should go the same place OTHER costs that exist but aren't related to labor go. Some examples:
Electricity. Needed to perform the job, but HARDLY a labor cost.
Water. Needed for both drinking and for bathrooms. Again, ESSENTIAL, but not labor.
Supplies. The stuff needed to make the cars. ABSOLUTELY essential, since without this you won't have ANY cars, but NOT a labor cost!
The retiree costs are simply administrative costs that belong in another fund. Granted, until they charge enough for the car to get above all the various costs they are losing money, but they are NOT all labor costs!!
JFerguson's question is a good one -- where should those costs be attributed.
Well, shouldn't the cost of the STEEL that goes into a car built in, say, 1980, be
costed to 1980? Shouldn't the cost of the GLASS that went into a car built in
1985 be attributed to that particular car, or group of cars? Shouldn't the cost
of servicing borrowed funds to build a vehicle in 1990 be put in the ledger for
1990?
Of course!
And if any business ever tried to put these kinds of costs into the ledger for
years downstream, they would be guilty of fraud. And if they declared profits
in those early years, and disbursed dividends, and so on, it would be
correctly viewed as a Ponzi scam and derided in the financial press.
The question is not where the costs of labor for a car built in 1993, or
1961, or 2003 should be assigned, it's why we have stood by mute for
a half century while all of the big three have engaged in this Ponzi scam,
and why we tolerate the nonsense of blaming the UAW for GM's phony
accounting techniques.
um..... Okay, they set aside money for all those years into a pension fund which was being invested. It was being invested SO WELL, in fact, that during the 90s GM had two profit making enterprises. GMAC, and the pension fund. They tried to change the laws to tap into some of that profit, though I don't remember how successful they were at that. However, no matter how successful the pension fund was at the time, sometimes it underperforms. In cases like that, the COMPANY is CONTRACTUALLY OBLIGATED to make up the difference. This means that they signed a contract with the employees that they would set aside x dollars for retirement, and that when the employees retired they would get y dollars per year.
If the company's pension fund cannot meet that, it's not a ponzi scheme for them to have to meet the contractual obligations earned a decade ago NOW!
You must be logged in to comment. Log in or connect with
